GlobalMedia Group LLC v. Logitech Inc

Filing 75

ORDER DENYING 62 Motion to Stay. Signed by Hon. Edward J. Davila on 7/13/12. (ejdlc3, COURT STAFF) (Filed on 7/13/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION
CASE NO. 5:11-CV-00778-EJD

GLOBALMEDIA GROUP LLC,

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ORDER DENYING MOTION TO STAY
ENFORCEMENT OF ORDER
COMPELLING ARBITRATION PENDING
APPEAL

Plaintiff,
For the Northern District of California

United States District Court

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v.
LOGITECH INC.,

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[Re: Docket Item No. 62]

Defendant.
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/
On June 7, 2012, this Court granted GlobalMedia’s Second Amended Petition to Compel

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Arbitration. Two weeks later, on June 20, Logitech filed the present motion to stay enforcement of

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the order compelling arbitration pending Logitech’s appeal to the Ninth Circuit Court of Appeals.

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I. LEGAL STANDARD
When deciding whether to stay the enforcement of a judgment pending its appeal, courts

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consider four factors: (1) whether the stay applicant has made a strong showing that he is likely to

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succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3)

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whether issuance of the stay will substantially injure the other parties interested in the proceeding;

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and (4) where the public interest lies. Nken v. Holder, 556 U.S. 418, 426 (2009) (citation omitted).

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To succeed in obtaining a stay, the applicant “must show, at a minimum, that she has a substantial

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case for relief on the merits.” Leiva–Perez v. Holder, 640 F.3d 962, 967–68, 970 (9th Cir. 2011).

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CASE NO. 5:11-CV-00778-EJD
ORDER DENYING MOTION TO STAY JUDGMENT PENDING APPEAL

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II. DISCUSSION

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Logitech’s motion indicates that it will argue on appeal that because AdjustaCam is “the real

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party in interest,” see Fed. R. Civ. P. 17(a), and a “necessary” party, see Fed. R. Civ. P. 19, the court

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lacks diversity jurisdiction over GlobalMedia’s petition. Mot. Stay 5–8, ECF No. 62. Notably,

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Logitech does not rely on an appeal of the Court’s finding that 28 U.S.C. § 1359 does not apply to

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the facts of this case. Neither Logitech’s stay motion nor GlobalMedia’s opposition mentions

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§ 1359; that argument is raised for the first time in Logitech’s reply brief, so the Court disregards it

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for the purpose of deciding whether to stay of enforcement of the judgment. See Zamani v. Carnes,

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491 F.3d 990, 997 (9th Cir. 2007) (district court “need not consider arguments raised for the first
time in a reply brief”).

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For the Northern District of California

United States District Court

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A.

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The court turns first to the likelihood of success on appeal of Logitech’s argument that

Rule 19

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AdjustaCam was a “necessary party.” By its use of the term “necessary party” Logitech seems to

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mean “required party.” See Mot. 7:23–25 (“. . . AdjustaCam will be [] bound by the outcome of

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arbitration, which confirms it is a required party under Rule 19(a)(1)(B)(I).”) (emphasis added).

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Such an argument would not affect the outcome of any appeal. In granting GlobalMedia’s petition,

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this court held that “[w]hether or not AdjustaCam is a ‘required’ party as defined by Rule 19(a)(1),

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this action should proceed between GlobalMedia and Logitech” pursuant to Rule 19(b), which lays

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out standards for determining whether a case should go forward when joinder of an otherwise

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required party is infeasible.1

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Even if Logitech’s contention that AdjustaCam is a “necessary party” means to challenge the

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court’s Rule 19(b) determination, it has not made a sufficient showing that such a challenge would

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succeed. The determination of whether an action can proceed in the absence of an otherwise

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required party is left to the discretion of the district court. Walsh v. Centeio, 692 F.2d 1239, 1241

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(9th Cir. 1982). A determination that an action should proceed in the absence of a required party is

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reviewed only for an abuse of that discretion. Id. Logitech calls into question this court’s

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Joining AdjustaCam is infeasible because its joinder would destroy diversity.
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CASE NO. 5:11-CV-00778-EJD
ORDER DENYING MOTION TO STAY JUDGMENT PENDING APPEAL

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determination that AdjustaCam’s rights are wholly derivative of GlobalMedia’s, and worries that the

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assignment provisions of the Settlement and License Agreement will allow AdjustaCam to pursue

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claims arising out of the SLA even after the matter is arbitrated with GlobalMedia. Mot. Stay at

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9–10. In the order granting GlobalMedia’s petition, this court effectively ruled that not all the

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provisions of the SLA are valid—notwithstanding any of GlobalMedia’s or AdjustaCam’s

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representations to the contrary. Suffice it to note that Logitech would have a sound defense against

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any claim brought by AdjustaCam arising out the SLA which Logitech had already arbitrated with

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GlobalMedia. No other grounds for overturning the Rule 19(b) determination are advanced, so this

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court concludes that Logitech has not met its burden of showing a “substantial case” for success on
appeal.

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For the Northern District of California

United States District Court

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B.

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Logitech has also failed to show a fair prospect of success of its “real party in interest”

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argument. The “real party in interest” requirement of Rule 17(a) serves “to prevent a defendant from

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multiple suits and multiple damage awards growing out of the same claim.” Hefley v. Jones, 687

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F.2d 1383, 1388 (10th Cir. 1982). Logitech alternates between attempting to show that AdjustaCam

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is “the ‘real party in interest’” and merely “a ‘real party in interest.’” Compare Mot. at 5:12–13 with

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Mot. at 6:14–15 (emphasis added). The distinction is meaningful. See, e.g., Virginia Elec. & Power

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Co. v. Westinghouse Elec. Corp., 485 F.2d 78, 85 (4th Cir. 1973) (“That an absent person who

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cannot be joined is a real party in interest does not conclude the matter—the court must determine

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whether, in equity and good conscience, the action should proceed without the person.” (emphasis

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added)). To win its Rule 17 argument, Logitech will need to show that AdjustaCam was the real

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party in interest to the exclusion of GlobalMedia.

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Rule 17

In an attempt to so demonstrate, Logitech cites five excerpts from the record which it claims

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this court failed to consider. Mot. at 5:18–6:4. The first and fifth excerpts have to do with

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AdjustaCam’s rights in the ’343 patent, which are irrelevant to the petition to compel arbitration of a

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dispute arising under the SLA contract. The fourth excerpt—an oral characterization made by

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counsel at a hearing of the terms of a contract—was disregarded because it was clearly contrary to

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the language of the contract itself, which was in the record.
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CASE NO. 5:11-CV-00778-EJD
ORDER DENYING MOTION TO STAY JUDGMENT PENDING APPEAL

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The second and third excerpts are representations made by AdjustaCam about the efficacy of

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the purported assignment of the SLA, a legal issue which the court decided in its Order. Order at

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5:4–9, ECF No. 60. Because the court found that GlobalMedia did not effectively make a full or

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complete assignment, it remained a real party in interest. Without any indication that Logitech will

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appeal the court’s determination of the effectiveness of the assignment, it appears that the Rule 17(a)

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argument will be unable to upend the order compelling arbitration.

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III. CONCLUSION
Logitech has failed to meet its burden here of showing that its appeal will make a
“substantial case for relief on the merits.” Accordingly, its motion to stay enforcement of the order

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For the Northern District of California

United States District Court

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compelling arbitration pending appeal is DENIED.

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IT IS SO ORDERED.

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Dated: July 13, 2012
EDWARD J. DAVILA
United States District Judge

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CASE NO. 5:11-CV-00778-EJD
ORDER DENYING MOTION TO STAY JUDGMENT PENDING APPEAL